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Polkadot’s price surge last week led to a breakout from the falling wedge pattern it had been following since March. As of the time of writing, the altcoin is trading at $6.47, marking its highest price point in seven days. The falling wedge pattern forms when an asset’s price moves between two downward-sloping trend lines. The upper trend line acts as a resistance level, while the lower trend line serves as support.
What’s Happening with Polkadot?
When an asset’s price breaks out from the upper trend line of a falling wedge, it is generally considered a bullish signal. This breakout indicates that buyers are pressuring sellers and the price may enter an uptrend. Polkadot broke this upper line on July 13 and has maintained its upward trend since then.
Additionally, at the time of writing, Polkadot’s Relative Strength Index (RSI) is at 57.81, confirming the increase in buying pressure over selling activity.
This indicator measures an asset’s overbought and oversold conditions and ranges from 0 to 100; values above 70 indicate that the asset is overbought and a price drop is expected, while values below 30 suggest that the asset is oversold and a recovery might be imminent. The rising RSI of DOT at 57.81 points to a steady increase in buying activities.
DOT Chart Analysis
The bullish trend for DOT has been increasing since July 11. This can be observed from the setup of the SAR indicator on the daily chart. Since July 11, the points of this indicator have been positioned below DOT’s price, following a month of being above the altcoin’s price.
The Parabolic SAR indicator measures an asset’s trend direction and identifies potential reversal points. When the indicator’s points are placed below the price, it signals an uptrend. This suggests that the asset’s price will continue to rise. As the market is currently in an uptrend, investors generally interpret this as a signal to hold long positions or consider entering new long positions.
Conversely, when the points are above the price, it indicates that the asset’s price will continue to fall. Considering new short positions is seen as a bearish signal. The bullish sentiment following DOT has been confirmed by the Parabolic SAR indicator’s points remaining below its price. If demand for the altcoin continues, it could trade above $6.57.
